We are having some issues with Shopify in the UK calculating VAT incorrectly. I have attached the order below. We are VAT registered in the UK, this order is for a customer in the UK. The hand tools and postage include VAT, the kids gloves are zero-rated (the product is flagged to not charge tax).
The hand tools are £79.80 and include £13.30 VAT
The postage is £4.95 and includes £0.82 VAT
Total VAT should be £14.12, yet the order is showing £13.91.
Technically, Shopify weights the shipping to the items and depending on whether the item bears VAT or not it applies VAT to the weighted proportion of shipping which is due to that item. Shopify does not do it correctly since this calculation should be done based on net of VAT price of products (Shopify applies the calculation to VAT inclusive prices) . The result is that VAT is not applied to the proportion of shipping attributed to the nontaxable item
This is a stupid way for it to work. In my case we sell VAT and non VAT related items, if the customer buys all none it doesnt inc VAT on the shipping, if they buy with VAT it does and if they buy half and hlaf it calculates it as above. The issue for me is due to this stupid mehtid councils will not pay their bill as it is not 100% accurate. causing me to lose money buy debt cashing with councils who cannot accomodate for this. Surely it should be programmed to be literal.
